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[2018] ZAFSHC 164
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DM v MM (1226/2018) [2018] ZAFSHC 164 (26 October 2018)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 1226/2018
In
the matter between:
D
M
[1]
PLAINTIFF/RESPONDENT
and
M
M
[2]
DEFENDANT/EXIPIENT
HEARD
ON:
19 OCTOBER 2018
CORAM:
M OPPERMAN, J
DELIVERED
ON:
26 OCTOBER 2018
JUDGMENT
BY:
M OPPERMAN, J
INTRODUCTION
1.
The overarching subject for adjudication
in
casu
is the law of contract. The vessel that
brought the matter before court is Rule 23(1); an exception. The
contracts and subsequent
conflict stem from a marriage between the
parties from which originated an Antenuptial Contract and a
Partnership Contract.
2.
The excipient is the Defendant (M M) in an
application for a decree of divorce that prays for:
2.1
A
decree of divorce;
2.2
Cost of suit;
2.3
An order for confirming the dissolution of the
partnership; An order appointing a liquidator with authority to
realise the whole
of the partnership assets, to liquidate the
liabilities of the partnership, to prepare the final account and to
pay to the parties
whatever is owing to them by virtue of the
Partnership Agreement.
3.
The
legality of both contracts
in
singuli
stands undisputed. The contracts were concluded in 1996
[3]
and 2010.
[4]
It existed
concurrently without controversy for eight years and even in the face
of the fact that the parties have been living
apart since June
2007.
[5]
The pending divorce
caused the provebial pot to boil over.
THE
EXCEPTION
4.
The exception lies in the claim that prayer 2.3
above is bad law and fails to disclose a cause of action.
5.
The “bad law” is set out in the
factors noted by excipient:
5.1
“
The plaintiff pleads that the alleged
partnership automatically terminated due to the breakdown of the
marriage relationship between
the Plaintiff and the Defendant.
5.2 From the above
pleaded averments, the Plaintiff pleads that a universal partnership
was established between the Plaintiff and
the defendant, which
partnership was subject to the existence of the marriage between the
Plaintiff and the Defendant.
5.3 The existence,
alternatively, the formation of a partnership, as pleaded, is in
direct contradiction and irreconcilable with
the terms of the
Antenuptial Agreement concluded between the Plaintiff and Defendant.
(The detailed terms of the antenuptial contract
is not known to the
court except for the fact that the parties were married to each other
out of community of property with exclusion
of the accrual system on
26 September 1996.)
5.4 The pleaded
Partnership Agreement serves to redefine the very nature and essence
of the Antenuptial Contract, and by so doing,
effectively, seeks to
substitute the matrimonial property regime agreed upon in the
Antenuptial Agreement, with a regime which
would have the opposite
effect.
5.5 The substitution of
the matrimonial property regime can only be affected with leave of
the court upon good cause shown. No such
relief is pursued by the
Plaintiff.”
THE
CENTRAL ISSUES
6.
The law of contract is predominant in the
adjudication of the matter.
6.1
The two contracts; Antenuptial and Partnership
Contracts must be evaluated.
6.2
The general principles of contracts as it stands
in law must be applied on the above.
6.3
The above will conclude in a finding on the
exception.
THE
REALITIES OF THE CASE
7.
The common denominator in the case is the
matrimonial relationship between the parties. Although the
Partnership Agreement stands
uncontested in essence, it interweaves
with the matrimonial relationship.
7.1
The parties
were married to each other out of community of property with
exclusion of the accrual system
[6]
and the clear intent was that at the time of the contract they wanted
all their resources to be separated in terms of matrimonial
law in
regard to past, present and future. This was in 1996 and there was
absolute consensus.
7.2
They separated in June 2007. Clearly the marriage
did only exist in law but not in fact from then onwards.
7.3
Moving away from matrimonial law and clearly
because a
de facto
marriage did not exist anymore; the parties had consensus to create a
partnership. The inference is clearly justified because the
partnership was entered into fourteen years after the marriage and
Antenuptial Agreement, the marriage did not exist
de
facto
anymore, the contract is a business and
commercial venture and focused on one particular asset accrued for
the purpose of the partnership
and also based on the income from
that. It is a separate legal entity in purpose, fact and law.
7.4
What entwines the contracts again is the clause
that: “The Partnership Agreement would endure for the lifetime
of the parties
or the duration of the marriage
relationship between them.
”
7.5
“
Marriage relation” is inferred to
mean marriage in law and the termination being a divorce. The
marriage has ceased to exist
de facto
at this time.
7.6
The phenomenon
in casu
has been recognised and pondered in our case law. In
Muhlmann
v Muhlmann
1984 (3) SA 102
(A) the
possibility of a universal partnership in the form of a
universorum
quae ex quastu venuit
between spouses married
out of community of property was recognised.
JW
v CW
2012 (2) SA 529
(NCK),
Rene
Smalberger v Gabriel Jacobus Stols
High
Court of South Africa, Eastern Cape Division, Port Elizabeth, case
number 1112/2012,
Butters v Mncora
2012 (4) SA 1
(SCA) and
RD v TD
2014 (4) SA 200
(GP) followed the central dictum. The outcomes were
of course, dependant on the diverse merits of the cases.
7.7
The Partnership Agreement terminated as a result
of the reality that the marriage relationship finally and
irretrievably broke down
and is now culminating into divorce and the
Defendant repudiated the partnership by cancelling the cession of the
life policy which
repudiation the Plaintiff accepted. Again,
consensus subsists.
8.
Counsel for both parties conceded that the
premise from which the court must adjudicate the case is that there
was consensus between
the parties at all times and during all their
actions and the contracts up until this time.
9.
That said the only complication to consensus
might be the fact that during the duration of the Partnership
Agreement the Defendant
acted as the sole manager of the partnership
business and conducted all the partnership transactions and was in
sole control thereof
and she; despite her obligation to do so, failed
to render to the Plaintiff an account of the partnership
transactions. It is,
however, not material to the exception.
10.
The Partnership Agreement terms are:
10.1
The Defendant would buy a townhouse in the
Homewood Town House Complex in her name, which townhouse she would
hold on behalf of
the partnership;
10.2
That the said townhouse would be rented out and
the monthly rent would accrue to the Partnership;
10.3
The purchase price would be financed partly by a
cash contribution by the parties and the balance of a mortgage bond
from ABSA Bank;
10.4
Defendant would take out a life policy in her
name for R400 000-00 and cede her rights in terms thereof to the
Plaintiff;
10.5
The Partnership Agreement would endure for the
lifetime of the parties or the duration of the marriage relationship
between them.
THE
LAW
11.
The Law of Contracts is clear.
11.1 In
Basson v
Chilwan and Others
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 762H Eksteen JA
referred to: “The paramount importance of upholding the
sanctity of contracts, without which all trade
would be impossible …”
Further, “if there is one thing that is more than public policy
requires, it is that
men of full age and competent understanding
shall have the utmost liberty of contracting, and that their
contracts when entered
into freely and voluntarily shall be held
sacred and shall be enforced by courts of justice. Therefore, you
have this paramount
public policy to consider - that you are not
lightly to interfere with this freedom of contract.”
11.2 Justice Ackermann in
Ferreira v Levin NO; Vryenhoek v Powell NO
1996 (1) SA
984
(CC) at paragraph 26 described it as “a central
consideration in a constitutional state.” These statements aim
for
reasonable certainty, so that parties can go about their business
knowing the rules of the game; constitutional economic integrity
is
vital.”
11.3 Moseneke J (as he
then was) pointed out in his dissent in
Barkhuizen v Napier
[2007] ZACC 5
;
2007 (5) SA 323
(CC) at paragraph 98 that: “Public
policy cannot be determined at the behest of the idiosyncrasies of
individual contracting
parties. If it were so, the determination of
public policy would be held ransom by the infinite variations to be
found in any set
of contracting parties.”
11.4 At the heart of the
last sentence above is the basic principle that commercial
transactions, freely and honestly entered into,
and not vitiated by
fraud, misrepresentation, duress or public policy, should be
respected and enforced.
FINDING
12.
The above demands that there cannot be any other finding than that
the Partnership Agreement is not in contradiction and irreconcilable
with the terms of the Antenuptial Agreement. The Partnership
Agreement does not redefine the nature and essence of the Antenuptial
Contract, and does not substitute the matrimonial property regime
agreed upon. The establishment of the Partnership Agreement within
the marriage was specifically intended by the parties to operate
outside of the matrimonial law sphere.
ORDER
The
exception is dismissed with costs.
________________________
M
OPPERMAN, J
COUNSEL
FOR PLAINTIFF: ADVOCATE WJ GROENEWALD
L
STRATING
ATTORNEY
FOR PLAINTIFF
SYMINGTON
& DE KOK
SYMINGTON
& DE KOK BUILDING
169B
NELSON MANDELA DRIVE
BLOEMFONTEIN
COUNSEL
FOR EXCIPIENT: ADVOCATE VAN ASWEGEN
JH
CONRADIE
ROSSOUWS
ATTORNEY
FOR EXCIPIENT
119
REITZ AVE
WESTDENE
BLOEMFONTEIN
[1]
Respondent/DPM
[2]
Excipient/MCM
[3]
Page 4, paragraph 4 of the record.
[4]
Page 4, paragraph 7.1 of the record.
[5]
Page 4, par 6.3 of the record.
[6]
No children were born of the marriage.